SBGFC extends financing program for SMEs by 1 year

The Small Business Guarantee and Finance Corp. (SBGFC) will extend the Implementation of the Transactional Direct Financing Facility (TDFF) for small exporters by another year.

Another P50 million has been allocated for the financing program this year.

This was announced yesterday by SBGFC caretaker Ma. Fina C. Yonzon following the approval of the extension by the board of the SBGFC.

The SBGFC is attached to the Department of Trade and Industry (DTI). It supports the development of small enterprises by promoting various modes of financing and credit delivery systems.

The TDFF is a financing program for small and medium enterprises (SMEs) for a specific or one-time sale transaction.

According to Dina Rodriguez, vice president for management services of the SBGFC, a small or medium exporter with a purchase order from a foreign buyer can apply for a loan from the SGBFC to buy raw materials or secure labor to fill its order from abroad.

To ensure repayment, the SBGFC requires the SME exporter to secure an endorsement from the Foreign Buyers Association of the Philippine (FOBAP) which is able to evaluate and look at the capability of the buyer and check on the necessary financial documentation.

Yonzon said the decision to extend the financing program was due to the absence of an alternative program in the market that would take the place of the TDFF in addressing the financial needs of SME exporters.

The SBGFC board had earlier planned to scrap the financing program because of repayment problems that resulted from the previous grant of loans even to exporters without the FOBAP endorsement.

The TDFF was initially offered in 1999.

Out of the TDFF portfolio of P64.319 million, the SBGFC reported, only seven accounts worth P5.979 million are in past due status. These represent just 7.6 percent of the total past due loans under the program. – Marianne Go